In this case, the Delaware Court of Chancery denied a motion for a summary judgment filed by the residual beneficiaries of a decedent’s will. In denying the defendants’ motion, Vice Chancellor Parsons explained that, because evidence exists that may possibly support the plaintiff’s argument that the decedent intended to change the beneficiary of his individual retirement account (the “IRA”), and due to the existence of disputed material issues of fact, the defendants’ motion for a summary judgment could not be granted without the risking a potential inequitable result.

The plaintiff sought a declaration that the plaintiff was the sole beneficiary of the decedent’s IRA, worth approximately $1.3 million. The plaintiff, the decedent’s only surviving relative, argued that she is entitled to be the sole beneficiary of the decedent’s IRA under the doctrine of substantial compliance. The plaintiff based her argument on evidence that the decedent—in the months preceding his death—took definitive steps to designate the plaintiff as the sole beneficiary of the IRA. But the decedent never completed the formal steps to designate the plaintiff as the beneficiary of the IRA. However, shortly after the decedent’s death, the plaintiff discovered a change of beneficiary designation form (the “Form”) at the decedent’s residence. The plaintiff argued that the Form, completed with the plaintiff’s personal information, provided evidence that the beneficiary intended to designate the plaintiff to be the sole beneficiary of the IRA. Thus, according to the plaintiff, under the substantial compliance standard, despite failing to comply with the formalities required to effectuate a change of beneficiary due to his medical incapacitation, the decedent’s intent to effect a change, as evidenced by the Form, should be enforced because the decedent did “all that was reasonably possible or necessary for him to change the beneficiary.”

The defendants argued that the plaintiff could not be the beneficiary of the IRA because the decedent, by not sending the Form to PNC Bank, never completed the steps required to change the beneficiary of the IRA. Because the decedent did not send the Form, and complete the formal process, despite having had several months to do so, the defendants argued that he did not intend to effectuate a change of beneficiary for the IRA.

Vice Chancellor Parsons explained that, although the Form was sent to the decedent more than three months before his death, the evidence in the record supported the plaintiff’s assertion that a material dispute exists surrounding the facts of decedent’s medical condition in the months after he received the Form. The Vice Chancellor determined that whether the decedent was incapacitated during this time is something that “[a] more developed factual record may lead the Court to find” that the plaintiff failed to satisfy the substantial compliance test. Therefore, the Court denied the defendants’ motion for a summary judgment, due to the material dispute concerning the decedent’s compliance with effectuating a change of beneficiary for his IRA.